The Senate panel approved by voice vote Martin J. Gruenberg
and Thomas J. Curry, the nominees for the FDIC and OCC jobs, as
well as Daniel M. Gallagher and Luis Aguilar, two nominees for
seats on the Securities and Exchange Commission. The nominations
now move to the full Senate for consideration.

The Obama administration has been without several confirmed
financial regulators as U.S. and European markets struggle with
sovereign debt concerns and extended political fights over
raising the U.S. debt limit. Gruenberg, the former vice chairman
of the FDIC, is operating as the acting chairman of the agency,
and John Walsh is the acting comptroller. The Federal Reserve,
Commodity Futures Trading Commission and the Consumer Financial
Protection Bureau also are awaiting confirmation of appointees.

The panel approved Obama’s nominees for two spots on the
SEC with the approval of Gallagher, a securities lawyer and
former SEC deputy division director, and Aguilar, an incumbent
Democrat on the commission. Gallagher, a Republican, is
currently a partner in the Washington office of Wilmer Cutler
Pickering Hale & Dorr LLP.

Roy Woodall, a former Kentucky state commissioner, was
approved by the panel to fill the insurance position on the 15-
member Financial Stability Oversight Council. Gregory Karawan, a
senior vice president and general counsel for Genworth Financial
Inc. (GNW), and Anthony D’Agostino, the chief operating officer of UBS
AG (UBS)’s Global Quantitative Analytics group, were approved by voice
vote to be directors for the Securities Investor Protection
Corp.

Nasdaq made the statement in response to an EU
questionnaire. The exchange, which dropped its bid in May for
NYSE Euronext’s equities, options and listings businesses after
the U.S. Justice Department threatened to block it, said the
Deutsche Boerse tie-up would be able to repel rivals partly
through “vastly lower collateral costs for customers.”

The European Commission last month opened an expanded probe
into the deal, citing concerns over reduced innovation in
derivatives products and technology.

The EU’s antitrust agency has set a deadline of Dec. 13 to
rule on Deutsche Boerse’s plans.

Martin Hedensio, a Stockholm-based spokesman for Nasdaq,
declined to comment.

Republicans Ask Geithner for Report on U.S. Rules Reductions

Republicans on the U.S. House Financial Services Committee
asked Treasury Secretary Timothy F. Geithner to provide an
update on rules that have been eliminated or streamlined since
the enactment of the Dodd-Frank Act.

Representative Spencer Bachus of Alabama, chairman of the
panel, made the statement at a press conference yesterday. He
said he and his colleagues made the request to Geithner in a
letter sent yesterday that cites a speech made on Aug. 2 of last
year in which Geithner said he would “streamline and simplify”
financial regulations wherever possible as agencies implement
Dodd-Frank rules.

The lawmakers gave Geithner and the interagency panel he
chairs, the Financial Stability Oversight Council, until Oct. 1
to report on efforts to reduce or eliminate “unnecessary or
duplicative regulatory burdens.”

Republicans and Democrats have sparred over the merits of
the new law since its enactment in July 2010, with Republican
lawmakers mostly opposed, saying it represents regulatory
overreach in financial markets.

Compliance Action

Pisa Has Right to Annul Swaps, Italy’s Highest Court Rules

Pisa’s provincial government has the right to annul swaps
contracts with Dexia Crediop SpA and Depfa Bank Plc, Italy’s
highest administrative court ruled.

Italy’s Council of State ruled that Italy’s administrative
courts have jurisdiction on the cases and that the agreements
may be annulled, according to Pasquale Vulcano, Pisa’s lawyer.

Pisa, known for its leaning tower, had stopped making
payments on the swaps, claiming that 95 million euros ($133
million) of bonds and derivatives sold by the banks in 2007
didn’t provide an economic advantage to the city. The city said
that the bank hid so-called implicit costs on the swaps that
made the new financing by Dexia, a unit of Brussels-based Dexia
SA (DEXB), and Depfa more expensive than existing debt.

Dexia Crediop is considering appealing the ruling in Italy
and the European Union, the company said in an e-mailed
statement. Officials for Depfa didn’t have an immediate comment
about the ruling.

The court will appoint an expert to assess whether the
contracts were economically convenient, the ruling said.

Alliance One, Deltafina Lose EU Antitrust Fine Court Appeal

Universal Corp.’s Italian unit Deltafina and Alliance One
International Inc. (AOI) lost European Union court appeals against
antitrust fines totaling 54 million euros ($75 million) for
colluding on prices they paid tobacco growers.

The EU General Court, the 27-nation region’s second-highest
tribunal, ruled today that the penalties were valid.

The European Commission, the EU’s antitrust regulator,
fined four companies, including two Alliance One units, 56
million euros for unlawfully rigging prices for more than six
years in a cartel that ended in 2002. Deltafina was fined 30
million euros while Alliance One was held jointly liable with
its two units for a 24 million-euro penalty.

Spokespeople for the companies in the U.S. didn’t
immediately respond to calls outside normal office hours.

The Serious Fraud Office decided not to bring charges
because it didn’t think it could win a conviction, the agency
said yesterday. Weavering Capital collapsed in March 2009 with
losses of more than $500 million after discovering the
counterparty for its biggest trading position was controlled by
the fund’s manager.

The agency was investigating interest-rate swaps between
the Weavering Macro Fixed Income Fund Ltd. and another Weavering
fund in the British Virgin Islands that were valued at more than
$600 million.

After considering the evidence, there wasn’t a reasonable
prospect of getting a conviction, SFO spokesman David Jones said
in an e-mail.

The U.S. Securities and Exchange Commission filed an
enforcement action against Shanghai-based Deloitte Touche
Tohmatsu CPA Ltd. for failing to produce documents related to an
investigation of its former auditing client Longtop Financial
Technologies Ltd. (LFT)

D&T Shanghai hasn’t provided any documents to the SEC,
which issued subpoenas to the firm on May 27, the agency said in
a statement, citing a filing in U.S. District Court in
Washington. As a result, the SEC has been unable to access
“critical” information in its probe of possible fraud at
Longtop, according to the statement.

Longtop, based in Hong Kong, said in May that D&T Shanghai
quit because of errors in the company’s financial records. The
SEC also began an investigation. In July, the SEC and Public
Company Accounting Oversight Board met with counterparts in
China to discuss cross-border oversight.

A federal appeals court in Virginia threw out two
challenges to the Obama administration’s 2010 health-care law,
saying it lacked authority to decide whether the measure is
constitutional.

With the rulings, the court in Richmond yesterday became
the second U.S. appellate panel this year to leave the law
intact after lower court judges ruled on its constitutionality.
A third appeals court threw out that mandate. The decisions came
in separate cases challenging the statute’s requirement that
individuals buy insurance or pay a tax penalty.

The rulings broaden the range of opinions on the health-
care law among the intermediate federal courts, a division
likely to be resolved by the U.S. Supreme Court.

The judges, in both decisions, said the court didn’t have
jurisdiction over the cases and dismissed them. In one, the
judges said a statute that generally blocks decisions on tax law
before taxes are collected barred a ruling on the health-
insurance mandate. In the other, they said the state of Virginia
lacked the legal right to bring its lawsuit.

The Virginia appeals stem from one challenge by the state
and another by Liberty University.

Virginia Attorney General Ken Cuccinelli said in a
statement that he would appeal the ruling without specifying to
which court.

Mathew Staver, dean of the Liberty University School of Law
called the outcome “astounding.” He said in an interview that
the school will petition the U.S. Supreme Court for review.

Tracy Schmaler, a spokeswoman for the Justice Department,
said in statement that “we welcome the dismissal of these two
challenges.”

The cases are Liberty University v. Geithner, 10-02347, and
Commonwealth of Virginia v. Sebelius, 11-01057, U.S. Court of
Appeals for the Fourth Circuit (Richmond).

Sino-Forest Halt Extended to January by Regulator Amid Probe

Canada’s main securities regulator extended the trading ban
on Sino-Forest Corp. (TRE)’s shares while it pores over tens of
thousands of documents as part of an investigation into possible
fraud at the forestry company.

Ontario Securities Commission Vice Chairman Mary G. Condon
lengthened the suspension to Jan. 25 at a hearing in Toronto
yesterday. Lawyers for Sino-Forest and former Chief Executive
Officer Allen Chan agreed to the move. Chan and four other
executives of the Hong Kong- and Mississauga, Ontario-based
company will be unable to trade securities through that date.

There isn’t “adequate information in the market” for
Sino-Forest investors to make decisions, Karen Manarin, a lawyer
for the commission, said at the hearing. The commission’s staff
sought an extension of the trading ban to give it time to review
the conclusions of the independent review, Manarin said.

Shareholders including billionaire Richard Chandler must
now wait at least four months to trade their shares. The stock
has plunged 74 percent in Toronto since June 1, the day before
short seller Carson Block’s Muddy Waters LLC research firm said
in a report Sino-Forest overstated timber holdings. Sino-Forest
has denied the allegations. The commission halted trading on
Aug. 26 and Chan resigned as chairman and CEO two days later.

Sino-Forest has established an independent committee of
directors to examine and respond to the allegations in the Muddy
Waters report. The company said Aug. 15 the investigation would
take until the end of the year to complete.

For more, click here.

FSA Gets New Freeze Order Against Online Bank-Services Firm

The Financial Services Authority won a court order
extending a freeze on some MonoBank Plc (WNW) assets, arguing the
online bank services company can’t solicit business in the U.K.
because it isn’t conducting business properly and may not be
authorized in the country.

Judge Guy Newey in London also renewed an order requiring
MonoBank to disclose information the FSA is seeking today. The
extended deadline was suggested by the company, said Ian Smith,
a lawyer for the financial regulator.

MonoBank, founded in 2004 and based in London, offers
prepaid credit cards and services on the Internet to the
“credit challenged” and small-business market in North and
South America, Europe and Asia, according to its website. Its
shares are listed on in Frankfurt.

The company and its lawyers weren’t in court yesterday. A
call to a number listed on the company website wasn’t answered
by MonoBank.

The case is: The Financial Services Authority v. MonoBank.

France Telecom May Lose Appeal Over $1.55 Billion in Aid

France Telecom SA (FTE), France’s largest phone company, should
lose an appeal over an order by the European Union to pay as
much as 1.1 billion euros ($1.55 billion) in back taxes to the
French government, an adviser to the EU’s top court said.

Niilo Jaeaeskinen, an advocate general for the EU Court of
Justice, said in a non-binding opinion yesterday that the EU
court should dismiss the appeal. The Luxembourg-based tribunal
follows such advice in a majority of cases.

The European Commission had probed France’s support for the
phone company when it was close to bankruptcy in 2002, deciding
that France Telecom had received improper tax benefits from 1994
through 2004. The Paris-based company is appealing a lower EU
court’s decision that sided with the regulator in 2009.

The Brussels-based commission won a separate case at the EU
high court in 2007 over France’s failure to recoup the tax
breaks. The tribunal rejected France’s arguments that the
commission should have given a more precise figure when it ruled
in 2004 that France Telecom must pay back as much as 1.1 billion
euros, plus interest.

Rulings by the EU’s top court take about six months from
the time of the opinion. France Telecom said the company has set
aside the funds in an escrow provision.

The case is: C-81/10 P, France Telecom v. European
Commission.

Comings and Goings

RBS Says 800 Jobs Saved After Condemned Offices Are Reprieved

Royal Bank of Scotland Group Plc (RBS), Britain’s biggest
government-controlled bank, reprieved two offices slated for
closure and committed to keep open a third site, saving about
800 jobs.

RBS will keep its Norwich and Liverpool offices open after
last year announcing their closure, according to an internal e-
mail sent to staff and confirmed by a spokesman. The Liverpool
site will now form part of a 300-branch sale to Santander U.K.
Plc. RBS will also keep its Nottingham office open after earlier
saying it was under review.

RBS has cut about 27,000 jobs since Stephen Hester took
over as chief executive officer from Fred Goodwin in 2008.
European banks announced more than 40,000 job cuts last month,
according to data compiled by Bloomberg, including 2,000 posts
axed by RBS’s securities unit, the bank said on Aug. 5.

David Fleming, the Unite trade union national officer, said
Unite “is extremely pleased” with the news.